Corporate law — a quick overview

What is the subject of corporate law?

The subject of corporate law is a company or corporation. This is a legal entity that was created to do business. The corporation needs various processes — management, financing, and enterprise organization. All these procedures are closely related to certain features and risks that inevitably appear in the legal field. To solve these problems, corporate law is provided.

In addition, the subjects of corporate law are directly the participants in the corporation and its management bodies.

What are the characteristics of corporate law?

Corporate law has several characteristics or rather principles. They all fit into one standard system, which is necessary to regulate legal relations in this area. These principles are distinct from civil law, although some general provisions influence corporate law. So, there are several principles of corporate law:

• The principle of good faith. We are talking about the fact that the participants of the corporation are obliged to participate in the adoption of critical corporate decisions. This is their responsibility. In particular, there will be no quorum without the participant’s vote.
• The priority of the interests of the company over the interests of shareholders. Therefore, members of the corporation cannot make transactions to the detriment of their organization.
• The principle of limited liability. It means that the assets of the corporation and the assets of the participants in the corporation are far from the same thing. Therefore, if a case is brought against the company in court, then only the organization’s assets will be at stake. The dispute should not concern the holdings of the shareholders.
• The principle of proportionality. Thanks to this mechanics, we get the proportionality of the number of assets to the votes — how much a corporation member has shares in the company, so much influence on decision-making.
• The principle of democracy. All decisions are taken by majority vote. The adopted decisions are binding on everyone, including those who abstained and voted against them.
• The principle of independence. All members of the board of directors and executive bodies of the corporation must remain impartial. Their task is to act reasonably and in good faith in the company’s interests.

Together, these principles make it possible to implement one of the main tasks of corporate law — transparent company management mechanisms.

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The list of areas of corporate law

There are several areas of corporate law practice. Lawyers in this industry must practice all existing rules and laws governing the operation of enterprises. We will analyze 6 areas in which all corporate lawyers can work:

General corporate law

General corporate law lawyers perform a range of tasks for large organizations. First, this advice on all issues related to investments and entering the international market.

In addition, this category includes the following activities: restructuring of legal entities, verification, compliance with all documentation, and attendance at business meetings essential to the corporation.

Separately, other tasks that fall on the shoulders of a corporate lawyer can be discussed.

Mergers and acquisitions

This is a separate category of corporate law dealing with business combinations. In this case, corporate lawyers fulfill some obligations:

• prepare documents for mergers and acquisitions;
• advise the client and give advice on all stages of the transaction;
• negotiate with corporate lawyers of other parties;
• conduct an assessment and due diligence of the work of the target company.

Insolvency and restructuring

Often this area of corporate law is classified into other categories. For example, it is classified as a dispute resolution or banking practice, which we will discuss below. However, many lawyers classify this type of task as a separate group since resolving issues of insolvency and company restructuring requires a unique approach.

Many companies face bankruptcy and lose the ability to pay taxes or loans. The lawyers working for them study the debtors’ rights, search for all possible solutions to save the company before declaring it bankrupt, and accompany the organization during the trial.

Dispute resolution

Litigation and disputes are processes that many large companies face. Corporate law lawyer working in this area:

• controls all processes;
• prepares documents;
• studies shareholder disputes and the powers of the board of directors, banks, etc.

Capital markets

Employees of a law firm specializing in corporate law often help companies that issue shares, work with investors, brokerage firms, etc. First of all, these are consultations on various issues. To conduct them, you need to know the current legislation on companies. In addition, lawyers prepare documents for amendments.

Banking and finance practice

A separate area of practice in corporate law deals with the provision of loans to companies and their cooperation with banks. This category includes some services:

• consultations at all stages of interaction with the bank;
• helping companies find the capital they need to launch sales, expand their business, etc.;
• negotiating on behalf of the lawyer’s client company;
• verification of the mortgage agreement;
• registration of an intercorporate loan, etc.

We have listed the main areas of corporate law. A lawyer can work within one category or combine several. The main thing is to understand in detail all the nuances and laws. This will bring maximum benefit to the company and contribute to its development.

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